Bloom Energy claims that it will be an unstoppable force in the alternative energy business and its got huge corporate support

The
future of energy is now, says Bloom Energy. At a press
conference today, it unveiled its surprisingly small fuel cell
"solutions" boxes. The so-called "Bloom Energy
Servers" – which are about as tall as an adult male – can
use virtually any hydrocarbon fuel (methane, propane, ethanol,
gasoline, liquified coal) and produce energy twice as efficiently as
a coal plant. Bloom Energy is trying to revolutionize the power
generation industry – the key is cutting out the middle-man (power
transmission) and embracing a modular design akin to servers, the
backbone of the internet.

The company's fuel cell boxes are
composed of ceramic (sand derived) discs and special ink. It
garnered
attention earlier this week when it was featured on the CBS news
program 60 Minutes. While many alternative energy
startups have struggled to find financial backers, it already has
publicized major support from some of the tech industry's biggest
names -- Google, eBay, Fedex, Staples, and Walmart.

At
the event it announced that its fuel cell generators emit 60 percent
less carbon per unit energy than a traditional coal power plant.
And unlike a coal power plant, the power is produced on site so there
are no grid losses. The whole process can be carbon neutral if
the hydrocarbon source is an organic such as algae or switchgrass
ethanol (as opposed to fossil fuels).

K. R. Sridhar, the
ex-NASA researcher who founded the company says that he initially
developed the technology to power Mars colonies, but in the end it
proved too compelling not to offer on Earth. He states, "After
spending a decade of working on this, I had to look back at our first
home. While I was dreaming about Mars and our colonies, historically
unprecedented things had happened on Earth. For me, it was
really a composite image of... a bright world and a dark world. It
was the image of the world of haves and the world of have nots. Those
who had the opportunity for economy growth and those who were denied
that."

He said the company was founded to provide the two
billion people worldwide without access to affordable power a new,
affordable energy source.

The result he obtained was a fuel
cell that went from "powder to power" and was "twice"
as efficient as traditional power plants due to the on-site scheme
eliminating grid losses. In his designs, a single fuel cell
disc produces 25 W; a "stack" composed of multiple cells
produces 1 kW; a "module" produces 25 kW; and a
corporate-ready "system" produces 100 kW. A corporate
"solution" (consisting of several Bloom Energy Servers or
"systems") supplies up to 1 MW of power.

The
power is continuous and flexible, unlike solar or wind energy.
As Mr. Sridhar describes, "This is not when the sun shines, this
is not when the wind blows... that's how this little piece of sand is
different than what's been done before.""

The real
flesh of Bloom Energy's plan, though, is its planned consumer debut
which will be carried out over the next few years. Bloom aims
at providing consumers with $3,000 units that will produce enough
power to support the average home at minimal fuel cost. It
plans to push the power generation industry towards the same model
that made the internet so fabulously successful -- server-based
scaling. In fact, it refers to its products as energy "servers"
-- entirely flexible, modular power units.

The units (of any
size) pay back their cost within 3 to 5 years and they will operate
efficiently for 10 years (at which point they would presumably be
serviced with new catalyst material, i.e. new fuel cell discs).

At
the event Bloom Energy mentioned several more big backers --
Coca-Cola, Bank of America, Cox -- that
have embraced the company's power generators [PDF]. Many of
these backers -- including John Donaho of eBay, Bill Simon of
Walmart, Brian Kelly of Coca-Cola, and Google's Larry Page – spoke
at the event expressing their wild enthusiasm for Bloom Energy's
delivery. Describes Donahoe, "It was almost too good to be
true."

With that kind of corporate support, it's hard not
to buy in to the hype. One thing that Bloom Energy did not note
was that most of the adoption thus far has been in California where
tax breaks could discount the Bloom Energy Servers by as much as 20
percent. With an additional 30 percent federal tax break for
"green" investments, the costs could be cut even further.
Still, even without tax breaks, if the company's payoff numbers and
reliability are as good as it says, the units could enjoy market
success. If that's true, that's great news for the startup and
a rarity in this business segment.

There are still some
unresolved questions, however. What exactly is the secret
"colored inks" that Bloom Energy paints its cells with and
are so great at catalyzing the production of energy from hydrocarbon
fuels? Bloom Energy still hasn't revealed the formula (perhaps
it's patent pending). Still, it today offered a lot more
details on its big corporate backing, its efficiency numbers, and its
plan for consumer rollout. It's definitely going to be a fun
ride watching this one in years to come.

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Interesting how they include efficiency of the electrical delivery network (grid loss, etc) but simply ignore the inefficiencies and delivery costs that would be imposed by this paradigm change. Whether it be beefing up existing NG delivery systems, having to tanker in more LNG in from middle east, installing alternative fuel pipeline(s) or bringing back local LPG trucking in fuels and storing them on site tanks like they used to do in rural and suburb areas in the 60's.

Also assuming such technology does take off (due to continued "green" subsidies being used pick the winners) the electrical grid will become even less efficient and the economics of the conventional power grid will be stressed towards the point of collapse. So we feed subsidies to favored "green" industries to collapse the "brown" economy. Yeah, sounds like we are in for some "change".

quote: The real flesh of Bloom Energy's plan, though, is its planned consumer debut which will be carried out over the next few years. Bloom aims at providing consumers with $3,000 units that will produce enough power to support the average home at minimal fuel cost.

$3,000 for a single home, while intriguing, is still too steep. I doubt most homeowners, especially during these hard times, are interested in spending an extra 3 grand for power when they are currently paying $40/month for their power. In addition, the homeowner must also hook up this unit to his gas supply and pay an increased gas bill. Natural gas used to be cheap. However, about 10 years ago, its cost skyrocketed. I personally have set my thermostat at 57F and rarely use my heater to keep my gas bill down.

Even as an emergency power generator, $3,000 is too high. A simple gasoline-powered generator costs about $350. This is enough to power your refrigerator to keep your food from spoiling and power a few lights while your electric company works to restore your power. I mention this because this is what happened to me in 2002. 60 MPH winds blew down power polls and knocked out power for 10 days. We were forced to BBQ all our meats, bake our tater tots, and give them to the power company workers. B^D

If I could buy a power plant that provided monthly savings, $3k would be a trivial cost to pay. Heck, a used car is more than $3k. But I don't believe the hype. Big corporations often do something not because it's cost-effective but rather because it makes them look socially responsible or trendy. Me, I could care less. I want lower net costs, and even with huge government subsidies fuel cells don't pencil out.

Also, natural gas did indeed take a huge jump a few years ago--and then fell back just as fast. I think current costs are about 1/3 what they were a few years ago.

Finally, are you serious? 57 degrees? Do you advise your visitors to bring parkas?

Ever heard of Financing? People will finance if you can show a definite savings in excess of their power bill. Here in Florida, a normal house, in summer, has a $225 electric bill, and our state is about to approve a 35% increase to those bills.

If they can show that an homeowner with at $250/month electric bill can cut that by more than half if not most of the way, then $3,000 is only a small investment toward the goal of energy independence. The more homes and corporations you get off the grid for dependence the faster your state can become neutral on energy or even an exporter.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer